“It seems that businesses overall are bullish about the future and spending money,” said Greg Muzzillo, founder of Top 40 firm Proforma (asi/300094). “We were up over 10% in the quarter and we expect to finish the year up over 10% as well.”
More than half (57%) of distributors reported a year-over-year rise in second-quarter sales, the highest percentage of growing firms in two years. Small distributor firms (less than $250,000 in annual revenues) reported an average sales increase of 4.3%, an improvement from 2.4% in Q1. Mid-sized distributors ($250,000 to $1 million) averaged 3.6% growth, while large firms (more than $1 million) fared the best in Q2, recording a 7.8% sales rise, on average.
“Our second quarter was quite consistent with the industry average,” said Dave Thompson, president of Top 40 distributor National Pen (asi/281040). “We believe growth is being driven by improved employment and a slight improvement in overall optimism.”
Distributors remain bullish about their overall sales for 2014, with 69% expecting an increase in revenues over last year. Eight in 10 large distributors are projecting a sales rise, with two-thirds of mid-sized and small companies also predicting a revenue jump. “We’re anticipating 15% year-over-year growth,” said Jason Black, CEO of Top 40 distributor Boundless Network (asi/143717). “As for the industry going forward, I think margins will get tighter across the board, small distributors will continue to be scrappy, and larger distributors without technology or a strong value proposition will lose market share.”